Wah Tata!!

Ratan Tata with the Tata Nano

January 10 2008 will go down in history as a watershed day for the automobile Industry. The revolutionary $2500 "peoples car" the Tata Nano, costing at least 50% less than any car manufactured anywhere in the world was unveiled by the septuagenarian Tata group chairman Ratan Tata. Owning a car, which was till now only a pipe dream is now well within reach of India's teeming middle classes. This is the Tata's moment in history; our very own Model T. The Nano is also testimony to the vision, perseverance and commitment of Ratan Tata.

The preceding year too was no less spectacular, what with Tata Steel acquiring the Anglo-Dutch behemoth Corus in a hard fought $12.1 billion deal. The Corus takeover was symbolic in many respects. In the early 20th century the group founder Jamsetji Tata had offered to make steel for the British controlled Indian Railways. The then chairman of British Steel (which became Corus following merger with the Dutch group Hoogovens) had scoffed volunteering to "eat every ounce of steel produced by Tata to British specifications". With the acquisition of Corus, the wheel had completed a full circle. The Empire had struck back. While the 21st century saw the Tatas silently gobble up companies from around the world like Tetley Tea and energy drink major Glaceau to name a few, it was the Corus deal that heralded the arrival of a hungry Indian Multinational corporation. The Elephant had truly woken up from its deep slumber.

2008 promises more excitement, with the Tata' s on the verge of acquiring Ford's marque brands Jaguar and the Land Rover in a $2 billion deal. Tata motors would be in the unique position of manufacturing the worlds cheapest as well as as the most expensive cars. To put things in perspective, the cost of the Nano is around the same as the cost of a DVD player in the top end Jaguars!! However what got my goat was the comment by the US Jaguar car dealers association that an Indian owned luxury car brand would not go well with US customers. This came on the back of the Orient Express's arrogant and racist comment that any association with the Tata owned Indian Hotels would result in erosion of the premium commanded by the Orient Express group hotels (on the contrary, the Tata hotels in the US command a higher revenue per room than the Orient hotels!). These responses from the US are born out of ignorance of the Tata groups pedigree.

Bombay House, headquarters of the Tata Sons

The Tata group was started in 1868 by Jamsetji Tata. The Tata group include some of the most outstanding companies of India like the flagship software firm TCS, Tata Steel, Tata Motors, the telephone service provider Tata Teleservices, the watch maker Titan, the retail chain Trent, the hotel chain Indian Hotels (who run the famous Taj brand hotels) to name a few. The steel to software conglomerate includes 98 companies operating in 85 countries employing around 400000 people, an MNC in every sense of the word. The group revenue is more than $50 billion dollars with a market cap of $72 billion and more than 2.9 million satisfied share holders.

The stratospheric numbers don't provide a complete picture of the essence of the Tata group. The Tatas are by far the most respected, loved and admired business house in India, a country which has traditionally looked down with contempt at the pursuit of wealth. The Tatas have created not personal wealth but wealth for the society at large. The family holding is just around 3%, which is why we don't see Ratan Tata's name in the list of the worlds wealthiest. The holding company Tata Sons is a grouping of charitable trusts. Local communities and groups have always been stakeholders in all Tata ventures. The Tatas have always been benevolent employers. Tata steel was the first Indian company to introduce 8 hr work shifts. When Tata steel was forced to lay off people in the 60s they ensured that the laid off workers would be paid a stipend for life!! Tata group companies always rank at the top of employee satisfaction parameters. The Tatas can be described as compassionate capitalists focused on wealth creation for the society at large. In fact one of the group values is defined as "what comes from the people goes back to the people many times over".

The Tata's have contributed immensely to society in the arts and the sciences. Jamsetji Tata set up India's premier institution for science and technology, the Indian Institute of Science (IISC). Nobelist Dr. CV Raman was a product of the IISC, which today is at the forefront of research in cutting edge technology. Other Tata institutions include the Tata Institute of Fundamental Research, the Tata Institute of social sciences and the National Center for the performing arts.

The Tata's have entrenched themselves in the hearts and minds of all Indians with their brand of Compassionate capitalism. Unfortunately, Ratan may be the last Tata to preside over the group. He is the last of the Tata's, a bachelor with no heirs and no kin. Upon his impending retirement the Tatas for the first time ever will be led by a non Tata. Ratan Tata would surely have identified his successor, a person who will not just lead the Tatas to greater heights but who will also closely guard the values and ethics that the Tatas have always stood for. In response to the ignorant arrogance of the Jaguar dealers and the Orient Express management I quote Shirley Williams of the British house of Lords "God help us if we cannot learn to respect Institutions like the Tatas of India". Amen.